Political Declaration

On 22 November 2018, the negotiators agreed on a Political Declaration setting out the Framework for the Future Relationship between the European Union and the United Kingdom, which expanded on and replaced the earlier ‘outline’ political declaration of 14 November. The Declaration was endorsed by EU leaders at a special meeting of the European Council on 25 November 2018.

Legal status
The Political Declaration (PD) is not a binding legal document and it is unlikely that it will bind the parties to anything beyond a commitment to negotiate for a future relationship in good faith, which is set out in Article 184 of the Withdrawal Agreement.

This section establishes that the future relationship should be based on the shared EU and UK values and principles such as respect for human

rights, democracy, the rule of law, working together globally, and the non-proliferation of nuclear weapons. It includes the UK’s commitment to respect “the framework” of the European Convention on Human Rights (rather than the ECHR itself) and the EU’s and the EU27’s commitment to the EU’s Charter of Fundamental Rights.

It includes a mutual commitment to “ensuring a high level of personal data protection” to facilitate data flows, and an EU intention to start work on adequacy decisions on the UK’s data framework “as soon as possible” after Brexit, “endeavouring” to adopt decisions by the end of 2020. There is also an intention that the UK will seek and the EU will grant, where legally possible and with a UK financial contribution, UK participation in EU programmes in areas such as science and innovation, youth, culture and education, overseas development, external action, defence capabilities, civil protection and space.

Part II: Economic Partnership

The PD calls on the UK and EU to agree on an ambitious, wide-ranging future economic partnership. It leaves many details to be decided during future negotiations and keeps a range of options open.

The future relationship will encompass a free trade area and cooperation in particular sectors where this is in the parties’ mutual interest. The economic partnership will cover trade in goods, trade in services and investment, and a number of sectors including financial services, digital, transport, energy and fishing. There are also sections on the movement of people and on procurement. Some of these are described below.

Trade in goods
The economic partnership should maintain the current situation of no tariffs or quotas on trade in goods between the UK and EU. Customs arrangements should “build and improve on” the single customs territory set out in the Withdrawal Agreement. At the same time, the PD refers to the UK having an independent trade policy.

The PD refers to a trading relationship which is “as close as possible”. There are no references to ‘frictionless’ trade or a ‘common rulebook’ for trade in goods, which were prominent features of the Chequers agreement. A range of outcomes for checks and controls are possible, depending on the final design of the customs and regulatory arrangements.

The importance of avoiding a hard Irish border is reiterated, with a commitment to considering technological solutions to the Irish border issue (although no specific solutions are proposed).

Trade in services
The PD leaves the settlement of trade in services and investment open for future EU-UK negotiations. It builds on the premise that the UK leaves the single market for services and pursues regulatory autonomy. On services and investment, the UK and the EU have an ambition to go well beyond the current commitments under the World Trade Organization (WTO) and existing free trade agreements (FTAs). The Government has noted that the principles agreed for services offer the UK the flexibility and regulatory autonomy needed.[1]

The PD also sets out principles of market access and non-discrimination, as well as broad terms of regulatory autonomy and cooperation.

Public procurement
The PD suggests that the UK and EU will open additional public procurement markets beyond those they are committing to open up via the WTO Government Procurement Agreement. The UK and EU may agree other measures that would encourage the two markets to be open to each other in practice. There will be mechanisms for reviewing and remedying breaches of the procurement rules.

Financial services
The PD recognises the interdependence of financial services across boundaries and the common interest in honest and sound markets and fair competition within them. To that end it highlights the need for continuing close cooperation between different regulators and regimes. The future basis of cooperation will be ‘equivalence’ which is different, and less extensive, than the current system of passported services.

A forthcoming Library Briefing Paper, Brexit deal: Economic analyses, will look at the economic impact of Brexit in more detail.

Part III: Security Partnership

Law enforcement and judicial cooperation in criminal matters
The future relationship will cover arrangements across three areas: data exchange; operational cooperation between law enforcement authorities and judicial cooperation in criminal matters; and anti-money laundering and counter-terrorism financing.

There will be arrangements for exchanges of Passenger Name Record (PNR) data, DNA, fingerprints and vehicle registration data (Prüm) and extradition arrangements; data-sharing arrangements for wanted and missing persons, exchange of criminal records and cooperation between the UK and Europol and Eurojust.

Foreign policy and defence
The PD reiterates many of the principles of future cooperation in foreign policy and defence already agreed in the negotiations, such as the need for “close, flexible and scalable cooperation” that respects the autonomy of both Parties; structured consultation between the UK and EU at different levels; the exchange of information, and the need for “close cooperation in Union-led crisis management missions and operations, both civilian and military”. But there is limited detail on how such principles will be delivered. While the language of the Declaration suggests a degree of compromise in certain areas, such as operational planning and defence industrial cooperation, it is unclear what either side has ceded or achieved in that discussion and what is left to be resolved once formal negotiations on the future security partnership commence.

Part IV: Institutional and Other Horizontal Arrangements

An overarching institutional will be underpinned by mechanisms for dialogue and arrangements for setting the direction and implementing the future relationship. Dispute resolution will be based on the dispute resolution mechanism in the Withdrawal Agreement.

Part V: Forward Process

Once the WA is concluded and before the UK leaves the EU, preparatory work will begin for the formal negotiations on the future relationship. The priority will be to find alternative, permanent arrangements for ensuring there is no hard border between Northern Ireland and Ireland.

Negotiations to conclude (ratify) the legal agreement(s) will begin as soon as the UK is a third country (30 March 2019) and both parties have committed to “best endeavours” to ensure the future relationship enters into force by the end of the transition period.

Before withdrawal
Between the approval of the PD and the UK’s exit from the EU, both parties will engage in preparatory organisational work in order to enable formal negotiations on the future partnership to commence rapidly.

After withdrawal
A procedure for EU negotiation of agreements with third countries is set out. After formal negotiations are launched the UK and EU will negotiate in parallel agreements on the future relationship.

Review
The UK and EU will convene a high-level conference every six months after the UK’s departure “to take stock of progress and agree, as far as is possible between them, actions to move forward”.